ECON101 DSM 2 TEST QUESTIONS AND ANSWERS LATEST UPDATE 2025
Contracts, insurance, patents, and accounting rules are: - Answers inventions that make the market
work better
The principle of increasing marginal opportunity cost states that the more resources are devoted to any
activity, the ________ the payoff to devoting additional resources to that activity - Answers Smaller
An outward shift on the PPF curve is most lively caused by: - Answers a technological advance that
affects both variables
In what type of economy does the government decide how most economic resources will be allocated? -
Answers Centrally Planned Economy
In the circular flow model, which refers to markets where goods such as computers or services such as
medical treatment are offered? - Answers Product Markets
A product produced in a foreign country and purchased by residents of the home country is called: -
Answers An import
Absolute advantage is the ability of an individual, firm, or country to: - Answers produce more of a good
or service than competitors using the same amount of resources
The role of the entrepreneur always involves: - Answers taking risks
Ms. Boulware is the best lawyer and best secretary in town. She has: - Answers an absolute advantage in
both jobs
What are copyrights designed to accomplish? - Answers Protect intellectual property rights
When nations specialize in their comparative advantage and engage in trade: - Answers overall
standards of living increase
What is the name given to the highest-valued alternative that must be given up to engage in any
activity? - Answers Opportunity cost
According to the theory of comparative advantage, specialization and free trade will benefit: - Answers
all trading partners who specialize in goods where they have comparative advantage
In the United States, property rights: - Answers are guaranteed by two amendments to the US
constitution
In the circular flow model of the economy, _________ are the suppliers of goods and services - Answers
firms
Which of the following is critical to the success of the market system? - Answers To allow individuals or
firms to have exclusive use of their property rights
Contracts, insurance, patents, and accounting rules are: - Answers inventions that make the market
work better
The principle of increasing marginal opportunity cost states that the more resources are devoted to any
activity, the ________ the payoff to devoting additional resources to that activity - Answers Smaller
An outward shift on the PPF curve is most lively caused by: - Answers a technological advance that
affects both variables
In what type of economy does the government decide how most economic resources will be allocated? -
Answers Centrally Planned Economy
In the circular flow model, which refers to markets where goods such as computers or services such as
medical treatment are offered? - Answers Product Markets
A product produced in a foreign country and purchased by residents of the home country is called: -
Answers An import
Absolute advantage is the ability of an individual, firm, or country to: - Answers produce more of a good
or service than competitors using the same amount of resources
The role of the entrepreneur always involves: - Answers taking risks
Ms. Boulware is the best lawyer and best secretary in town. She has: - Answers an absolute advantage in
both jobs
What are copyrights designed to accomplish? - Answers Protect intellectual property rights
When nations specialize in their comparative advantage and engage in trade: - Answers overall
standards of living increase
What is the name given to the highest-valued alternative that must be given up to engage in any
activity? - Answers Opportunity cost
According to the theory of comparative advantage, specialization and free trade will benefit: - Answers
all trading partners who specialize in goods where they have comparative advantage
In the United States, property rights: - Answers are guaranteed by two amendments to the US
constitution
In the circular flow model of the economy, _________ are the suppliers of goods and services - Answers
firms
Which of the following is critical to the success of the market system? - Answers To allow individuals or
firms to have exclusive use of their property rights
